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article imageMurdoch's 21st Century Fox sees profits fade

By AFP     Feb 6, 2014 in Business

Rupert Murdoch's 21st Century Fox reported a drop in quarterly profits Thursday despite revenues rising strongly at the film and television conglomerate.

In the second fiscal quarter to December 31, net profit fell by half to $1.2 billion compared to a year earlier, when one-time gains boosted earnings.

Revenues were up 15 percent at $8.2 billion. Shares rose 1.35 percent to close at $31.57.

Murdoch, the Australian-born tycoon who last year split off the company's fast-growing entertainment assets from its publishing interests, welcomed "top-line revenue growth across our businesses."

But he also said the results "reflect the planned investments we are making in our core businesses to support long-term growth."

"We remain confident that these investments, together with our demonstrated ability to consistently grow our revenues, will drive 21st Century Fox's future profits," the 82-year-old said.

The results showed the Fox cable television operation was the only unit showing growth in operating earnings. Other units, including broadcast television, satellite and film, showed profit declines.

Murdoch split his corporate empire into two parts last June under a long-promised plan to "unlock value" by separating high-flying entertainment operations from struggling publishing activities. He remains in charge of both.

The 21st Century Fox group includes the Fox Hollywood studios and television entities, which are showing better performance than the publishing arm. That group is known as the new News Corp.

In a separate release the publishing arm said it posted a profit of $150 million, down from $1.4 billion a year earlier when the earnings were boosted by a one-time gain.

Revenues were nearly flat at $1.08 billion from $1.16 billion in the comparable period in 2012.

"The earnings report demonstrates a measure of progress as we navigate a challenging advertising market," News Corp. CEO Robert Thomson said.

"We are continuing to be disciplined on costs, while making opportunistic investments. The digital transformation is certainly under way... digital subscriptions and website traffic are on the rise at most of our sites."

Shares in News Corp. rose 2.6 percent to end at $16.02 ahead of the earnings report, and gained in after-hours trade.

News Corp operates The Wall Street Journal and New York Post newspapers in the United States, The Times, Sunday Times and the Sun in Britain, and The Australian in the country of the tycoon's birth as well as book publishing and educational activities.

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